<PAGE>

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1996

                                       OR

[ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 1-10938

                   SEMICONDUCTOR PACKAGING MATERIALS CO., INC.
                 (Name of Small Business Issuer in its charter)

              Delaware                             13-3584740
    (State of other jurisdiction                (I.R.S. Employer
  of incorporation or organization)            Identification No.)

                 431 FAYETTE AVENUE, MAMARONECK, NEW YORK 10543
          (Address of principal executive offices, including zip code)

                                 (914) 698-5353
              (Registrant's telephone number, including area code)

        Indicate by check mark whether the  Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

             (1)  Yes       [X]               No        [ ]

             (2)  Yes       [X]               No        [ ]

        The  number of shares  outstanding  of the  Registrant's  sole  class of
common stock, as of September 30, 1996 was 5,979,266 shares.



                                        1


<PAGE>

<PAGE>


PART I.        FINANCIAL INFORMATION

ITEM 1.        FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
                      INDEX TO FINANCIAL [ZW]
STATEMENTS                                    PAGE
<S>                                                                                  [ZW]
<C>
                      Consolidated Balance Sheet at
                      September 30, 1996 and December 31, [ZW]
1995.                        3

                      Consolidated Statement of Income
                      for the three and nine months ended
                      September 30, 1996 and [ZW]
1995.                                     4

                      Consolidated Statement of Cash Flows
                      for the three and nine months ended
                      September 30, 1996 and [ZW]
1995.                                     5

                      Consolidated Statement of Shareholders' Equity
                      for the nine months ended September 30, [ZW]
1996                     6

                      Notes to Consolidated Financial [ZW]
Statements                       7

                      Management's Discussion and Analysis of
                      Financial Condition and Results of [ZW]
Operations                    8-12

ITEM 2.        PRO FORMA [ZW]
INFORMATION                                                   13

                      Pro Forma Consolidated Statement of
                      Income for the three months ended
                      September 30, 1995 [ZW]
(Unaudited)                                   14

                      Notes to Unaudited Pro Forma Consolidated
                      Statement of Income for the three months
                      ended September 30, [ZW]
1995                                         15

                      Pro Forma Consolidated Statement of
                      Income for the nine months ended
                      September 30, 1995 [ZW]
(Unaudited)                                   16

                      Notes to Unaudited Pro Forma Consolidated
                      Statement of Income for the nine months
                      ended September 30, [ZW]
1995                                         17

PART II        OTHER [ZW]
INFORMATION                                                       18

SIGNATURE  [ZW]
PAGE                                                                        19

EXHIBITS                                                                               [ZW]
20
</TABLE>


                                        2



<PAGE>

<PAGE>



          SEMICONDUCTOR PACKAGING MATERIALS CO., INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET



<TABLE>
<CAPTION>

                                                                 SEPTEMBER [ZW]
30,   DECEMBER 31,
ASSETS                                                              [ZW]
1996             1995
                                                                 (UNAUDITED)
<S>                                                              [ZW]
<C>              <C>          
Current Assets:                                                   [ZW]
-----------     ------------
 Cash and cash equivalents                                       $ [ZW]
4,165,129     $   4,244,075
 Accounts receivable, less allowance for doubtful
 accounts of $134,000 and $86,000, respectively                    [ZW]
6,558,774         3,580,791
 Inventories                                                       [ZW]
8,311,597         4,735,967
 Prepaid expenses and other current assets                           [ZW]
730,805           561,395
                                                                  [ZW]
-----------      -----------
Total current assets                                              [ZW]
19,766,305        13,122,228
                                                                  [ZW]
-----------      -----------
Property and Equipment-at cost, net of accumulated
depreciation and amortization of $5,883,415
and $4,204,498, respectively                                      [ZW]
14,651,917        11,042,546
                                                                  [ZW]
-----------       -----------
Other Assets-net of accumulated amortization
 Deferred financing costs                                              [ZW]
7,506            30,007
 Technology rights and intellectual property                         [ZW]
763,491           805,401
 Goodwill                                                         [ZW]
14,637,507        10,724,346
 Other                                                             [ZW]
1,701,353           346,253
                                                                 [ZW]
-----------        ----------
Total other assets                                                [ZW]
17,109,857        11,906,007
                                                                 [ZW]
-----------       -----------
Total Assets                                                    $ [ZW]
51,528,079      $ 36,070,781
                                                                 [ZW]
===========       ===========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
 Accounts payable                                               $  [ZW]
2,811,836      $  1,478,946
 Accrued expenses                                                  [ZW]
2,911,527           911,269
 Current portion of obligations under capital leases               [ZW]
1,093,959           588,351
 Current portion of long-term debt                                 [ZW]
1,365,000           343,333
 Amounts due to related [ZW]
parties                                                        625,000
                                                                 [ZW]
-----------       -----------
Total current liabilities                                          [ZW]
8,182,322         3,946,899
                                                                 [ZW]
-----------       -----------
Deferred income taxes                                                [ZW]
676,760           563,460
Long-term debt                                                     [ZW]
5,085,000           600,833
Obligations under capital leases                                   [ZW]
3,466,966         1,698,328
                                                                    [ZW]
-----------    -----------
Total Liabilities                                                  [ZW]
17,411,048        6,809,520
                                                                    [ZW]
-----------    -----------

Minority Interest                                                     984,202
                                                                    [ZW]
-----------    -----------
Shareholders' Equity:
 Preferred stock-$.10 par value; authorized 1,000,000
  shares, none issued Common stock-$.10 par value;
  authorized 10,000,000 shares, issued 6,279,266
  and 6,190,066 shares, respectively                                  [ZW]
627,927          619,007
 Additional paid-in-capital                                        [ZW]
27,550,796       27,214,097
 Retained Earnings                                                  [ZW]
4,954,106        1,428,157
                                                                  [ZW]
-----------       -----------
                                                                   [ZW]
33,132,829       29,261,261
 Less: Treasury stock: 300,000 shares, at cost
                                                                  [ZW]
-----------      -----------
Shareholders' Equity                                               [ZW]
33,132,829       29,261,261
                                                                  [ZW]
-----------      -----------
Total Liabilities And Shareholders' Equity                       $ [ZW]
51,528,079     $ 36,070,781
                                                                  [ZW]
===========      ===========
</TABLE>




                 See Notes to Consolidated Financial Statements





                                        3






<PAGE>

<PAGE>




          SEMICONDUCTOR PACKAGING MATERIALS CO., INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                FOR THE THREE MONTHS         FOR THE NINE MONTHS
                                 ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                                  1996         1995          1996           1995
                              -----------   -----------   -----------   [ZW]
-----------
<S>                           <C>           <C>           <C>           [ZW]
<C>        
Net Sales                     $ 8,665,927   $ 5,217,345   $24,862,210   [ZW]
$14,728,768
Service Revenue                 3,280,446     1,785,110    10,574,227     [ZW]
5,393,105
                              -----------   -----------   -----------   [ZW]
-----------
Total Revenue                   11,946,373     7,002,455    35,436,437    [ZW]
20,121,873

Cost of Goods Sold              5,835,571     3,432,422    17,691,894     [ZW]
9,753,908
Cost of Services Performed      1,899,562       902,280     5,515,298     [ZW]
2,491,558
                              -----------   -----------   -----------   [ZW]
-----------
Cost of Goods Sold and
Services Performed              7,735,133     4,334,702    23,207,192    [ZW]
12,245,466
                              -----------   -----------   -----------   [ZW]
-----------

Gross Profit                    4,211,240      2,667,75    12,229,245     [ZW]
7,876,407

Selling, General and
Administrative Expenses         1,995,643     1,605,361     5,816,359     [ZW]
4,800,518
                              -----------   -----------   -----------   [ZW]
-----------

Operating Income                2,215,597     1,062,392     6,412,886     [ZW]
3,075,889

Interest Expense (Net)            234,331       159,074       653,536       [ZW]
929,529
                              -----------   -----------   -----------   [ZW]
-----------

Income Before Provision for
Income Taxes                    1,981,266       903,318     5,759,350     [ZW]
2,146,360

Provision for Income Taxes        717,470       206,912     2,233,401       [ZW]
456,763

                              -----------   -----------   -----------   [ZW]
-----------
Net Income                    $ 1,263,796   $   696,406   $ 3,525,949   $ [ZW]
1,689,597
                              ===========   ===========   ===========   [ZW]
===========


Income per Common Share       $       .21   $       .13   $       .57   $       [ZW]
 .36
                              ===========   ===========   ===========   [ZW]
===========

Weighted Average Number of
Common Shares Outstanding       6,156,671     5,529,272     6,145,586     [ZW]
4,745,754
                              ===========   ===========   ===========   [ZW]
===========
</TABLE>





                 See Notes to Consolidated Financial Statements




                                        4






<PAGE>

<PAGE>



          SEMICONDUCTOR PACKAGING MATERIALS CO., INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)



<TABLE>
<CAPTION>

                                                                        FOR THE [ZW]
THREE MONTHS               FOR THE NINE MONTHS
                                                                         ENDED [ZW]
SEPTEMBER 30,                ENDED SEPTEMBER 30,
                                                                        [ZW]
1996               1995           1996             1995
<S>                                                                 [ZW]
<C>              <C>              <C>              <C>         
Cash Flows From Operating Activities:                               ----------[ZW]
--     ------------     ------------     ------------
Net Income                                                          $  [ZW]
1,263,796     $    696,406     $  3,525,949     $  1,689,597

 Adjustments To Reconcile Net Income To Net
 Cash Provided By Operating Activities:
  Depreciation And Amortization Of Property And Equipment                [ZW]
605,526          434,339        1,679,447        1,141,357
  Other Amortization                                                     [ZW]
169,746          119,133          509,238          353,157
  Deferred Income [ZW]
Taxes                                                                                    [ZW]
113,300
 Changes In Operating Assets And Liabilities:
  Increase In Accounts Receivable                                       [ZW]
(588,444)        (126,971)      (1,872,179)        (562,843)
  Increase In Inventories                                               [ZW]
(831,320)        (347,516)      (1,817,318)      (1,063,967)
  (Increase) Decrease  In Prepaid Expenses And
    Other Current Assets                                                [ZW]
(109,114)         442,270         (166,645)         153,116
  Increase (Decrease) In Accounts Payable                                [ZW]
764,310       (1,088,827)         558,960         (307,477)
  Increase In Accrued Expenses                                           [ZW]
783,039          203,127        1,958,530          120,496
                                                                    [ZW]
------------     ------------     ------------     ------------
Net Cash Provided By Operating Activities                              [ZW]
2,057,539          331,961        4,489,282        1,523,436
                                                                    [ZW]
------------     ------------     ------------     ------------
Cash Flows From Investing Activities:
 Purchase Of Property And Equipment                                     [ZW]
(119,009)      (1,945,534)      (1,914,496)      (4,382,090)
 (Increase) Decrease In Other Assets                                    [ZW]
(695,042)         172,943       (1,365,438)          36,561
 Acquisition of [ZW]
Subsidiary                                                                              [ZW]
(6,556,440)
                                                                    [ZW]
------------     ------------     ------------     ------------
Net Cash Used In Investing Activities                                   [ZW]
(814,051)      (1,772,591)      (9,836,374)      (4,345,529)
                                                                    [ZW]
------------     ------------     ------------     ------------
Cash Flows From Financing Activities:
 Proceeds From Redemption Of Warrants                                      [ZW]
2,400                             2,400        1,133,884
 Proceeds From Exercise Of Stock Options                                   [ZW]
9,038          196,840          196,969          271,170
 Proceeds From Public Stock [ZW]
Offering                                                   [ZW]
16,861,538                        16,861,538
 Proceeds From Long-Term [ZW]
Debt                                                                            [ZW]
6,000,000
 Payment Under Revolving [ZW]
Credit                                                        [ZW]
(2,000,000)                       (1,565,000)
 Payments Under Capital Leases                                          [ZW]
(265,405)        (108,955)        (644,259)        (284,354)
 Payment Under Term Loan Agreements                                      [ZW]
(60,000)      (8,585,833)        (646,166)      (9,007,500)
 Borrowing Under Equipment Line Of [ZW]
Credit                                                  [ZW]
70,374                           348,158
 Decrease In Amounts Due Related [ZW]
Parties                                                 (188,332)        [ZW]
(625,000)        (500,887)
 Minority Interest Contribution                                          [ZW]
984,202                           984,202
                                                                    [ZW]
------------     ------------     ------------     ------------
Net Cash Provided By Financing Activities                                [ZW]
670,235        6,245,632        5,268,146        7,257,009
                                                                    [ZW]
------------     ------------     ------------     ------------

Net Increase (Decrease) In Cash                                        [ZW]
1,913,723        4,805,002          (78,946)       4,434,916
Cash At Beginning Of Period                                            [ZW]
2,251,406          197,628        4,244,075          567,714

                                                                    [ZW]
------------     ------------     ------------     ------------
Cash At End Of Period                                               $  [ZW]
4,165,129     $  5,002,630     $  4,165,129     $  5,002,630
                                                                    [ZW]
============     ============     ============     ============

Supplemental schedule of noncash investing and financing activity:

 Machinery and equipment acquired under capital leases              $ [ZW]
1,606,627           225,032     $ 2,916,355      $    243,881

</TABLE>



                 See Notes To Consolidated Financial Statements


                                        5






<PAGE>

<PAGE>



          SEMICONDUCTOR PACKAGING MATERIALS CO., INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996


<TABLE>
<CAPTION>
                           PREFERRED STOCK           COMMON STOCK       [ZW]
ADDITIONAL                   TREASURY STOCK       TOTAL
                          -------------------      ------------------    [ZW]
PAID-IN       RETAINED    -----------------  SHAREHOLDERS'
                          SHARES       AMOUNT      SHARES     AMOUNT     [ZW]
CAPITAL       EARNINGS     SHARES   AMOUNT      EQUITY
                          ------       ------      ------      ------    [ZW]
----------     --------     ------   ------   -------------
<S>                        <C>         <C>      <C>         <C>        [ZW]
<C>           <C>          <C>        <C>      <C>        
Balance at
January 1, 1996              0           $0       6,190,066   $619,007   [ZW]
$27,214,097   $1,428,157   300,000    $0       $29,261,261

Issuance Of
Common Stock
Through The
Exercise Of Stock
Warrants                                              1,200        120         [ZW]
2,280                                          2,400

Issuance Of
Common Stock
Through The
Exercise Of Stock
Options                                              73,000      7,300       [ZW]
189,669                                        196,969

Issuance Of
Common Stock In
Connection With
The Acquisition Of
A Subsidiary                                         15,000      1,500       [ZW]
144,750                                        146,250


Net [ZW]
Income                                                                             [ZW]
3,525,949                          3,525,949

                     ---------   ----------       ---------   --------   [ZW]
-----------   ----------   -------    --       -----------
Balance at
September 30, 1996          0           $0       6,279,266   $627,927   [ZW]
$27,550,796   $4,954,106    300,000    $0       $33,132,829
                     =========   ==========       =========   ========   [ZW]
===========   ==========   =======    ==       ===========
</TABLE>



                 See Notes To Consolidated Financial Statements



                                        6






<PAGE>

<PAGE>

          SEMICONDUCTOR PACKAGING MATERIALS CO., INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   The consolidated  financial statements include the accounts of the Company,
     its wholly  owned  subsidiaries  and its  majority  owned  subsidiary.  The
     consolidated  balance  sheet as of  September  30, 1996,  the  consolidated
     statement of income for the three and nine months ended  September 30, 1996
     and 1995, the  consolidated  statement of cash flows for the three and nine
     months ended September 30, 1996 and 1995 and the consolidated  statement of
     shareholders'  equity for nine months ended  September 30, 1996,  have been
     prepared by the Company and are  unaudited.  In the opinion of  management,
     all adjustments necessary to present fairly the financial position, results
     of  operations  and cash flows at  September  30,  1996 and for all periods
     presented have been made.

2.   Earnings  per share - Earnings  per share are  computed  using the weighted
     average number of common shares actually  outstanding  plus the shares that
     would be  outstanding  assuming the exercise of employee  stock options and
     stock warrants during the periods presented.

3.   See the Company's  Annual Report on Form 10-KSB for the year ended December
     31, 1995 for  additional  disclosures  relating to the Company's  financial
     statements.

4.   A provision for income taxes of $717,000 and  $2,233,000  has been made for
     the three and nine month periods ended September 30, 1996, respectively, as
     compared to a $207,000 and  $457,000  provision in the three and nine month
     periods ended September 30, 1995, respectively. In the three month and nine
     month periods ended  September 30, 1996, the Company's  earnings were taxed
     at an effective tax rate of 36.2% and 38.7%,  respectively,  as compared to
     an effective tax rate of 22.9% and 21.2% in the  comparable  three and nine
     month  1995  periods,  respectively.  The  effective  tax rates in the 1995
     periods were lower than the  effective tax rates in the 1996 periods due to
     the  utilization of  consolidated  net operating loss carry forwards in the
     1995 periods.

5.   Effective  January 2, 1996, the Company acquired all of the common stock of
     Retconn  Incorporated  ("Retconn"),  a manufacturer of coaxial contacts and
     connectors  for  $5,750,000 in cash,  subject to an adjustment of $192,000,
     based on the closing net worth as defined in the stock purchase  agreement.
     This business combination was accounted for as a purchase. The Company also
     issued 15,000 of its common shares, valued at $146,250, in conjunction with
     the acquisition.  In addition,  the Company incurred approximately $618,000
     in costs  associated  with the Retconn  acquisition.  The fair value of the
     assets acquired,  including approximately $4,336,000 allocated to goodwill,
     which  is  being  amortized  over 25  years,  amounted  to  $7,674,000  and
     liabilities assumed amounted to $968,000.

6.   Effective  August  28,  1996,  the  Company  entered  into a joint  venture
     agreement to develop a silicon wafer  polishing and reclaiming  facility in
     Singapore.   The  jointly  owned   Singapore   corporation,   International
     Semiconductor  Products Pte Ltd ("ISP"),  is 50.1% owned by the Company and
     49.9%  owned  by  a  holding  company,   Semiconductor  Alliance  Pte  Ltd.
     Accordingly, the Company's consolidated balance sheet at September 30, 1996
     and  consolidated  statement  of cash  flows for the  three and nine  month
     period  ended  September  30,  1996  reflect a $984,202  minority  interest
     contribution  made by the Company's  joint venture  partner for the periods
     presented.  As of  September  30,  1996,  ISP did not have any  revenues or
     expenses.



                                        7






<PAGE>

<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS (FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30,
1996 COMPARED TO THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995)

Total  revenues for the three month period ended  September  30, 1996  increased
$4,944,000,  or 71%, over the comparable 1995 period. The increase was primarily
due to the  inclusion  of  $2,939,000  of  revenues  from  Retconn  Incorporated
("Retconn"),  which was  acquired  by the  Company as of January 2, 1996,  a 84%
increase in revenues at American Silicon Products ("ASP"), primarily as a result
of increased capacity;  and a 31% increase in revenues at Polese Company, due to
increased sales of its copper/tungsten  heat dissipation  products.  Revenues at
the parent company  ("SPM")decreased  4% from prior year levels due to decreased
orders from certain microelectronic customers. Total revenues for the nine month
period  ended  September  30,  1996  increased  $15,315,000,  or 76%,  over  the
comparable  1995  period.  The increase was  primarily  due to the  inclusion of
$8,210,000 of revenues  from  Retconn;  a 96% increase in revenues at ASP, a 29%
increase in revenues at Polese Company and a 3% increase in revenues at SPM. For
the nine month period  ended  September  30, 1996 and 1995,  direct sales of the
Company's  products into foreign markets  accounted for  approximately  9.9% and
5.3%,  respectively,  of consolidated  revenues.  The Company does not currently
maintain  any  foreign  manufacturing  operations.  As of August 28,  1996,  the
Company  entered  into a joint  venture  agreement  to  develop a silicon  wafer
polishing and reclaiming  facility in Singapore.  Foreign sales are made through
seventeen foreign manufacturer's  representatives and are priced and paid for in
U.S. dollars.

Gross  profit for the three month  period  ended  September  30, 1996  increased
$1,543,000, or 58%, from the comparable 1995 period. Approximately $1,124,000 of
this increase was attributable to the inclusion of Retconn's gross profit. ASP's
gross profit increased 56%, SPM's gross profit decreased 9% and Polese Company's
gross profit increased 6% from the comparable 1995 period. The decrease in gross
profit  at SPM was  attributable  to lower  sales  volume.  As a result of lower
margins  at SPM,  Polese  Company  and  ASP,  and  the  inclusion  of  Retconn's
operations  in the 1996  period,  (gross  margins  of  Retconn  are  lower  than
historical  margins of the Company)  gross margin  decreased to 35% in the three
month period ended  September 30, 1996 from 38% in the  comparable  1995 period.
Gross  profit for the nine month  period  ended  September  30,  1996  increased
$4,353,000, or 55%, from the comparable 1995 period. Approximately $2,856,000 of
this increase was attributable to the inclusion of Retconn's gross profit. ASP's
gross profit increased 74%, SPM's gross profit decreased 7% and Polese Company's
gross profit  decreased  26% from the  comparable  1995 period.  Gross profit at
Polese  Company  decreased  primarily  due  to  the  temporary   curtailment  of
operations   at  its  plating   facility  in  February   caused  by   production
difficulties,  which difficulties have since been resolved. As a result of lower
margins  at SPM,  Polese  Company  and  ASP,  and  the  inclusion  of  Retconn's
operations,  gross  margin  decreased  to 35% in the  nine  month  period  ended
September 30, 1996 from 39% in the comparable 1995 period.

Selling,  general  and  administrative  ("SG&A")  expenses in the three and nine
month  periods  ended  September  30,  1996  increased  $390,000,  or  24%,  and
$1,016,000, or 21%, respectively, over the comparable 1995 periods. The increase
was due to the inclusion of Retconn's  SG&A costs with the Company's in the 1996
periods.  SG&A  expenses as a percentage  of sales  decreased  from 23% and 24%,
respectively,  in the three and nine month periods  ended  September 30, 1995 to
17% and 16%, respectively, in the comparable 1996 periods.

Net interest  expense for the three and nine month periods  ended  September 30,
1996 increased $75,000 and decreased $276,000, respectively, from the comparable
1995  periods.  The  increase in interest  costs in the three month period ended
September 30, 1996 related primarily to interest costs associated with term debt
incurred in conjunction with the Retconn  acquisition.  The decrease in interest
costs in the nine month period ended September 30, 1996 was primarily related to
a decrease in interest  expense at ASP from prior year levels.  Debt incurred in
the

                                     8






<PAGE>

<PAGE>




ASP  acquisition  was retired using a portion of the proceeds from the Company's
July 1995 public offering.

A provision  of $717,000 and  $2,233,000  for income taxes has been made for the
three and nine month periods ended September 30, 1996, respectively, as compared
to a $207,000 and $457,000  provision in the three and nine month  periods ended
September  30,  1995,  respectively.  In the three month and nine month  periods
ended September 30, 1996, the Company's  earnings were taxed at an effective tax
rate of 36.2% and 38.7%,  respectively,  as compared to an effective tax rate of
22.9% and  21.2%,  respectively,  in the  comparable  three and nine  month 1995
periods.  The  effective  tax  rates in the 1995  periods  were  lower  than the
effective tax rates in the 1996 periods due to the  utilization of  consolidated
net operating loss carry forwards in the 1995 periods.

As a result of the  foregoing,  net income  increased by  $567,000,  or 81%, and
$1,836,000,  or 109%,  respectively,  in the three and nine month  periods ended
September 30, 1996 over the comparable  1995 periods.  In the three month period
ended September 30, 1996, all of the Company's  operations were  profitable.  In
the nine month period ended September 30, 1996, the parent company,  Retconn and
ASP were profitable,  while Polese Company experienced approximately $212,000 in
after  tax  losses,   respectively.   It  is  expected  that  Polese   Company's
profitability   will   continue  to  improve  as  it  increases   sales  of  its
copper/tungsten heat dissipation products and improves its productivity.

                         LIQUIDITY AND CAPITAL RESOURCES

The Company has  financed its capital  needs  through the proceeds of its public
offerings,  its revolving  credit  facility and term loans from First Union Bank
(the "Bank") and cash flow from operations.

At September 30, 1996, the Company had cash and cash equivalents of $4,165,000,
of which $1,968,000 related to cash at International Semiconductor Products Pte
Ltd ("ISP"), and an available balance on its revolving credit facility of
$5,000,000.

Net cash  provided by operating  activities  in the three and nine month periods
ended September 30, 1996 amounted to $2,058,000 and $4,489,000, respectively, as
compared  to $332,000  and  $1,523,000,  respectively,  in the  comparable  1995
periods.  Cash provided by operating  activities  in the 1996 periods  increased
over the 1995  periods  primarily  as the  result of a $567,000  and  $1,836,000
increase in net income in the three and nine month periods  ended  September 30,
1996,  respectively,  and a $783,000 and $1,959,000 increase in accrued expenses
in the three and nine month  periods  ended  September  30, 1996,  respectively,
primarily due to increased  provisions  for income taxes.  In the three and nine
month  periods  ended  September  30, 1996,  depreciation  and  amortization  of
property and equipment and other  amortization in total  increased  $222,000 and
$694,000,  respectively,  over the comparable 1995 periods. These increases were
due to increased depreciation and amortization  associated with investments made
by the Company in property and equipment in 1995 and 1996 and from  amortization
of goodwill  associated with the Retconn  acquisition.  In the nine month period
ended  September 30, 1996, the Company  recorded a net deferred tax liability of
$113,000  representing  the tax  effects of  temporary  differences  between the
Company's  book and tax  bases.  In the  three  and  nine  month  periods  ended
September  30, 1996,  the Company  used a total of  $1,420,000  and  $3,689,000,
respectively,  of cash derived  from  operations  to fund  increases in accounts
receivable  and  inventories  as  compared  to  using a total  of  $474,000  and
$1,627,000 to fund such increases in the comparable 1995 periods.  The increases
in the  Company's  accounts  receivable  and  inventories  were made to  support
increased  revenues.  Prepaid expenses and other current assets in the three and
nine month periods ended  September  30, 1996  increased  $109,000 and $167,000,
respectively,  and  decreased  $442,000  and  $153,000,   respectively,  in  the
comparable  1995 periods,  primarily due to periodic  fluctuations in refundable
deposits for fixed asset  additions.  Accounts  payable  increased  $764,000 and
$559,000  in  the  three  and  nine  month  period  ended  September  30,  1996,
respectively,  as compared to decreasing $1,089,000 and $307,000,  respectively,
in the comparable  1995 periods.  In the 1995 periods,  the Company  reduced its
accounts payable days outstanding to be in line with industry standards.


                                        9






<PAGE>

<PAGE>

        To support the Company's  growth and enhance its  profitability,  in the
three and nine month periods  ended  September  30, 1996,  the Company  invested
$119,000  and  $1,914,000,  respectively,  in  property,  machinery,  equipment,
tooling and leasehold improvements,  compared to an investment of $1,946,000 and
$4,382,000,  respectively,  in the  comparable  1995  periods.  This  investment
excludes  $1,607,000 and $2,916,000 invested in the three and nine month periods
ended  September  30, 1996,  respectively,  and excludes  $225,000 and $244,000,
respectively,  invested the three and nine month  periods  ended  September  30,
1995, for equipment  acquired under capital leases.  The majority of the capital
lease arrangements which the Company and its subsidiaries have entered into have
lease terms of five years and provide for a bargain purchase when the lease term
expires.  At September  30,  1996,  the Company had capital  commitments  in the
approximate  amount of $4,789,000 for the  acquisition  of certain  equipment to
upgrade and enhance the Company's manufacturing  capabilities.  At September 30,
1996, the Company was also committed to purchase a $2,200,000  building to house
SPM's  operations,  $1,760,000  of which was  financed  through  term debt.  The
building was acquired by the Company on November 4, 1996.  The Company  believes
that the lease  financing  available to it for certain  equipment  together with
cash flow from operations will be sufficient to fund its capital needs.

Other assets increased $695,000 and $1,365,000,  respectively,  in the three and
nine month periods ended  September 30, 1996 as compared to decreasing  $173,000
and $37,000,  respectively, in the comparable 1995 periods. These increases were
primarily  due to  increases  in deposits on  equipment  to be  purchased by the
Company.  Of the  $1,365,000  increase in other  assets in the nine month period
ended September 30, 1996, $1,205,000 related to increased deposits on equipment.

Effective  January 2, 1996,  the  Company  acquired  all of the common  stock of
Retconn,  a manufacturer of coaxial  contacts and connectors,  for $5,750,000 in
cash,  subject to an adjustment  of $192,000,  based on the closing net worth as
defined in the stock purchase agreement. This business combination was accounted
for as a purchase.  The Company also issued 15,000 of its common shares,  valued
at $146,250,  in conjunction  with the  acquisition.  In addition,  to date, the
Company has paid  approximately  $614,000 in costs  associated  with the Retconn
acquisition.  The fair value of the  assets  acquired,  including  approximately
$4,336,000  allocated  to  goodwill,  which is being  amortized  over 25  years,
amounted  to  $7,674,000  and  liabilities  assumed  amounted  to  approximately
$968,000.

As a result of the  foregoing,  the Company used $814,000 and  $9,836,000 in its
investing  activities in the three and nine month  periods  ended  September 30,
1996,   respectively,   as  compared  to  using   $1,773,000   and   $4,346,000,
respectively, in the comparable 1995 periods.

On  February 8, 1994,  the Company  registered  698,625  shares of common  stock
purchasable  pursuant to the exercise of  redeemable  warrants.  The  redeemable
warrants  were  distributed  without  cost as a  distribution  to the  Company's
stockholders  of  record as of  February  8,  1994.  Stockholders  received  one
redeemable warrant for each share of common stock held by the stockholder.  Each
redeemable  warrant was  exercisable to purchase  one-half (1/2) share of common
stock at an  exercise  price of $2.00 per  share.  Certain  stockholders  of the
Company,  including, but not limited to, the Company's Chairman and three of its
directors,  agreed to contribute the redeemable  warrants issued to them back to
the Company.  Consequently,  the additional 831,000 shares which would have been
issuable upon the exercise of such redeemable  warrants were not issued or sold.
The registration  statement also related to shares of the Company's common stock
issuable  upon the exercise of warrants to purchase  170,250  shares held by the
warrant  solicitation agent and certain of its affiliates.  On January 24, 1995,
the Company called its Common Stock Purchase Warrants for redemption.  As of the
redemption  date,  February  23, 1995,  all but 98,918  purchase  warrants  were
exercised.  In the nine month  period  ended  September  30,  1995,  the Company
received net proceeds of $1,134,000 from the redemption of common stock purchase
warrants and  solicitation  agent warrants.  In the three and nine month periods
ended  September  30,  1996 the  Company  received  proceeds  of $2,400 from the
exercise of solicitation agent warrants.


                                       10






<PAGE>

<PAGE>






In the three and nine month  periods  ended  September  30,  1996,  the  Company
received $9,000 and $197,000,  respectively,  as compared to receiving  $197,000
and $271,000, respectively, in the comparable 1995 periods, from the exercise of
stock options.

On August 1, 1995,  the Company sold an aggregate of 1,654,500  shares of Common
Stock in a public  offering.  The Company received net proceeds of approximately
$16,900,000 after deducting underwriting discounts,  commissions and expenses of
the offering of approximately  $2,300,000.  The Company used the proceeds of the
offering,  among other things,  to repay  outstanding  bank  indebtedness in the
amount of $8,250,000  incurred in connection with the ASP acquisition,  to repay
approximately $208,000 of the outstanding balance due on a $500,000 twelve month
term loan and to repay the Company's borrowings under its revolving credit line.
The Company  used the balance of the  proceeds of the  offering to purchase  and
improve its new ASP facility, to purchase machinery and equipment for all of its
operations and for general corporate and working capital purposes.

In  connection  with the Retconn  acquisition,  on January 4, 1996,  the Company
entered into a term loan with the Bank in the  principal  amount of  $6,000,000.
The loan bears  interest at the Bank's loan pricing rate (8.25% at September 30,
1996)and the  principal is payable in 48  consecutive  monthly  installments  of
$125,000 commencing on February 1, 1997. Interest on the loan is payable monthly
and commenced on February 1, 1996.

On December 20, 1995,  the Company  entered into a $7,500,000  revolving  credit
facility, a $2,000,000 capital lease facility and a $10,000,000 uncommitted line
of  credit  with the  Bank.  $5,000,000  of the  revolving  credit  facility  is
available to the Company for working capital purposes and $2,500,000 is used for
a standby letter of credit to support the Company's gold consignment arrangement
with a financial  institution.  The revolving  credit facility bears interest at
 .25% under the Bank's loan pricing rate and is unsecured with the exception of a
first priority security interest in the Company's gold inventory in the event of
a drawing under the letter of credit. The facility is also guaranteed by each of
the Company's  subsidiaries.  A fee equal to one half percent of the  $7,500,000
line was paid.  The maturity  date of the facility is  September  30, 1997.  The
$2,000,000 capital lease facility is being used for equipment lease transactions
which bear interest at prevailing rates at lease inception dates and provide for
bargain  purchases  at the end of such  leases.  The Bank  has a first  priority
security  interest in the  equipment  which is leased  under the  facility.  The
Company did not pay any fee for the  $10,000,000  uncommitted  line and therefor
the  availability  of the line is at the discretion of the Bank. The Company has
utilized  $6,000,000  of  the  $10,000,000  uncommitted  line  for  the  Retconn
acquisition,  and has  paid a fee for the use of the  loan  facility.  The  loan
agreement  provides,  among  other  things,  that the Company  maintain  certain
financial  ratios.  The  Company is also  subject to  restrictions  relating  to
incurring  additional  indebtedness,  additional  liens and security  interests,
capital  expenditures and the payment of dividends.  In the three and nine month
periods  ended  September  30,  1996,  the  Company had not  borrowed  under its
revolving credit  facility.  In the three and nine month periods ended September
30, 1995, the Company repaid $2,000,000 and $1,565,000,  respectively, under its
revolving credit facility.

In conjunction with the Company's acquisition of Polese Company on May 27, 1993,
the Company acquired from Frank J. Polese, the former sole shareholder of Polese
Company, all of the rights,  including a subsequently issued patent, for certain
powdered metal  technology and its application to the  electronics  industry for
$250,000 in cash and $750,000 in notes,  as modified,  including  interest at 7%
per  annum.  The  note  was paid in full  and as a  result,  in 1995 Mr.  Polese
received the balance of principal payments due under the note totaling $424,000.
For a period of ten years,  Mr.  Polese has the right to receive  10% of (I) the
pre-tax profit from the copper tungsten product line, after allocating operating
costs and (ii) the proceeds of the sale,  if any, by the Company of the powdered
metal  technology.  To  date,  no  payments  have  been  made  pursuant  to this
agreement.



                                       11






<PAGE>

<PAGE>



To facilitate the  acquisition by the Company of Polese Company on May 27, 1993,
the Company  entered into a $1,200,000  five year term loan  agreement  with the
Bank.  The term loan  agreement  calls for the  repayment  of the loan in twenty
equal installments which commenced on October 1, 1993.  Further, on December 16,
1993, the Company entered into a $465,000 five year term loan agreement with the
Bank. The term loan agreement  called for the repayment of such loan in eighteen
equal  installments  which  commenced  on April 1,  1994.  The term  loans  bore
interest  at the  Bank's  loan  pricing  rate  plus  1.5%.  The term  loans  are
collateralized  with a blanket lien on substantially all of the parent company's
assets,  excluding  the  common  stock  and  assets of its  subsidiaries.  As of
September  30,  1996,  the Company had repaid all amounts due under the $465,000
term loan and had an outstanding  balance of $450,000 due on the $1,200,000 term
loan.

The Company has, and expects to be able to continue to, meet its  obligations to
the Bank from cash  generated  from  operations.  As at September 30, 1996,  the
Company  was in  compliance  with  all of the  covenants  contained  in its loan
agreements.

In conjunction with the ASP acquisition,  certain of the former  stockholders of
ASP were to receive  one-third of ASP's adjusted  earnings  before  interest and
taxes in excess of $650,000 per fiscal quarter,  (the "Consulting  Agreements"),
through  December  31,  1999.  Payments  and  amounts  due under the  Consulting
Agreements  have been  recorded on the Company's  books as  additional  purchase
price.  In the fourth quarter of 1995, the Company bought out the remaining four
years of payments due under the  Consulting  Agreements for $725,000 in cash and
notes (of which $625,000 was outstanding at December 31, 1995) and 52,500 shares
of the Company's  common stock.  In January 1996,  the Company paid the $625,000
note in full.

Effective August 28, 1996, the Company entered into a joint venture agreement to
develop a silicon wafer  polishing  and  reclaiming  facility in Singapore.  The
jointly owned Singapore  corporation,  International  Semiconductor Products Pte
Ltd ("ISP),  is 50.1% owned by the Company and 49.9% owned by a holding company,
Semiconductor  Alliance  Pte Ltd.  In the three  and nine  month  periods  ended
September  30,  1996,  the Company  and its joint  venture  partner  each made a
$984,202 equity contribution into ISP.

As a result of the above,  in the three and nine month periods  ended  September
30,  1996,  $670,000  and  $5,268,000,  respectively,  of cash was  provided  by
financing activities. This compares to net cash provided by financing activities
of $6,246,000 and $7,257,000,  respectively, in the three and nine month periods
ended  September 30, 1995. As a result of the  Company's  operations  and equity
financing  activities,  shareholders'  equity  increased  $3,872,000 in the nine
month period ended September 30, 1996.

The Company  continually  seeks to broaden its product  lines by various  means,
including  through  acquisitions.  The  Company  intends  to pursue  only  those
acquisitions  for which it will be able to arrange the  necessary  financing  by
means of the issuance of additional equity, the use of its cash or, through bank
or other debt financing.

The Company  believes  that it has the  capacity for growth and that its working
capital and internally  generated funds,  combined with its bank line of credit,
the proceeds it has received from its public  offerings,  and from other sources
of financing,  will be sufficient to satisfy the Company's currently anticipated
cash requirements on both a short-term and long-term basis.


                                       12






<PAGE>

<PAGE>


                              PRO FORMA INFORMATION

The following unaudited pro forma combined financial  statements and explanatory
notes are  presented  to reflect  the  acquisition  of the  business  of Retconn
Incorporated  ("Retconn ") by Semiconductor  Packaging  Materials Co., Inc. (the
"Company") effective as of January 2, 1996.

The pro forma  statements  of income for the three and nine month  periods ended
September 30, 1995, give effect to these transactions as if they had occurred at
the beginning of the periods presented.

The pro forma information  should be read in conjunction with (1) the historical
financial  statements  for the Company,  including  the related  notes  thereto,
included in the  Company's  Form 10-KSB for the fiscal year ended  December  31,
1995,  and  included  in the  Company's  Form 10-QSB for the three and six month
periods ended March 31, 1996 and June 30, 1996,  respectively (2) the historical
financial statements of Retconn, including the related notes thereto and (3) the
Company's  Form 8-K and 8-K/A  filed on  January  5,  1996 and  March 15,  1996,
respectively.

The pro forma information is not necessarily  indicative of the combined results
of  operations or combined  financial  position that would have resulted had the
acquisition  been  consummated as of the date noted above, nor is it necessarily
indicative of the combined  results of operations in any future period or of the
future combined financial position.



                                       13






<PAGE>

<PAGE>


          SEMICONDUCTOR PACKAGING MATERIALS CO., INC. AND SUBSIDIARIES
                   PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                FOR THE THREE MONTHS ENDED [ZW]
SEPTEMBER 30, 1995
                                                [ZW]
--------------------------------------------------------------------
                                                HISTORICAL

                                                SEMICONDUCTOR
                                                PACKAGING MATERIALS
                                                CO., INC. AND   [ZW]
RETCONN                                PRO FORMA
                                                SUBSIDIARIES    [ZW]
INCORPORATED         ADJUSTMENTS       AS ADJUSTED
                                                -------------   [ZW]
-------------        -------------     -------------
<S>                                             <C>              [ZW]
<C>                 <C>               <C>       
Net sales                                       $5,217,345       [ZW]
$2,464,385                            $7,681,730
Service revenue                                  [ZW]
1,785,110                                              1,785,110
                                                ----------      [ZW]
-----------          -----------        ----------
Total revenue                                    7,002,455        [ZW]
2,464,385                             9,466,840

Cost of goods Sold                               3,432,422        [ZW]
1,735,458                (245)(1)     5,167,635
Cost of services performed                         [ZW]
902,280                                                902,280
                                                ----------      [ZW]
-----------          -----------        ----------

Total cost of goods sold and services performed  4,334,702        [ZW]
1,735,458                 (245)       6,069,915

Gross profit                                     2,667,753          [ZW]
728,927                  245        3,396,925

Selling, general and administrative expenses     1,605,361          [ZW]
213,016               44,054(4)     1,862,431
                                                ----------      [ZW]
-----------          -----------        ----------

Operating income                                 1,062,392          [ZW]
515,911              (43,809)       1,534,494

Interest expense (net)                             159,074            [ZW]
4,435              129,271 (2)      288,345
                                                                                          [ZW]
(4,435)(3)
                                                ----------      [ZW]
-----------          -----------        ----------

Income before provision for income taxes           903,318          [ZW]
511,476             (168,645)        1,246,149

Provision for income taxes                         [ZW]
206,912                               141,452 (5)       348,364
                                                ----------      [ZW]
-----------          -----------        ----------
Net income                                        $696,406         [ZW]
$511,476            $(310,097)         $897,785
                                                ==========      [ZW]
===========          ===========        ==========

Net income per common share                          $0.13       [ZW]
$51,147.60                                  $0.16
                                                ==========      [ZW]
===========          ===========        ==========

Weighted average number of [ZW]
common                                                            (10)(6)
shares outstanding                               5,529,272               [ZW]
10               15,000 (6)     5,544,272
                                                ==========      [ZW]
===========          ===========        ==========
</TABLE>


                                       14






<PAGE>

<PAGE>


          SEMICONDUCTOR PACKAGING MATERIALS CO., INC. AND SUBSIDIARIES
          NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995



(1)  Adjustment  which reflects three months of depreciation  expense on Retconn
     Incorporated   machinery  and  equipment  and  furniture  and  fixtures  at
     appraised values  amounting to $431,204,  assuming an estimated useful life
     of seven years on a straight  line basis  adjusted  by actual  depreciation
     expense on machinery and  equipment and furniture and fixtures  recorded by
     Retconn  Incorporated  for the  three  months  ended  September  30,  1995,
     amounting to $15,645.

(2)  Adjustment  which records interest expense on a $6,000,000 term note with a
     floating rate yielding an effective interest rate of approximately 8.5%.

(3)  Adjustment  which  records  reduction in interest  expense on $200,000 term
     note repaid concurrent with the acquisition.

(4)  Adjustment  which  records the  amortization  of the excess of the purchase
     price  paid for the fair  market  value of all  tangible  and  identifiable
     intangible assets acquired less liabilities  assumed,  totaling $4,405,430,
     amortized over an estimated useful life of twenty-five years.

(5)  Federal  income  taxes have been  provided for the three month period ended
     September 30, 1995  primarily  because  Retconn  Incorporated  prior to its
     acquisition  by the Company,  was treated as an S  corporation  for federal
     income tax  purposes.  The  income tax  provision  of  $141,452  represents
     Retconn's   pre-tax  income  of  $511,476  less  total  pre-tax  pro  forma
     adjustments of $168,645  adjusted for  Connecticut  income taxes of 11% and
     federal income taxes of 34%. 

(6)  Adjustment  which  reflects the issuance of 15,000  shares of the Company's
     common stock commensurate with the acquisition and the retirement of (10) S
     corporation shares.


                                       15






<PAGE>

<PAGE>



          SEMICONDUCTOR PACKAGING MATERIALS CO., INC. AND SUBSIDIARIES
                   PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                     FOR THE NINE MONTHS ENDED [ZW]
SEPTEMBER 30, 1995
                                                     [ZW]
------------------------------------------------------------------------
                                                     HISTORICAL
                                                     SEMICONDUCTOR
                                                     PACKAGING MATERIALS
                                                     CO., INC. AND           [ZW]
RETCONN                             PRO FORMA
                                                     SUBSIDIARIES            [ZW]
INCORPORATED      ADJUSTMENTS       AS ADJUSTED
                                                     -------------           [ZW]
-------------     -------------     -----------
<S>                                                   <C>                   [ZW]
<C>                <C>               <C>        
Net sales                                             $14,728,768           [ZW]
$6,754,600                           $21,483,368
Service revenue                                         [ZW]
5,393,105                                                  5,393,105
                                                       ----------           [ZW]
----------         -------------     -----------
Total revenue                                          20,121,873            [ZW]
6,754,600                            26,876,473

Cost of goods Sold                                      9,753,908            [ZW]
4,763,442                  (735)(1)  14,516,615
Cost of services performed                              [ZW]
2,491,558                                                  2,491,558
                                                       ----------           [ZW]
----------         -------------     -----------
Total cost of goods sold and services performed        12,245,466            [ZW]
4,763,442                  (735)     17,008,173

Gross profit                                            7,876,407            [ZW]
1,991,158                   735       9,868,300

Selling, general and administrative expenses            4,800,518              [ZW]
645,790               132,163(4)    5,578,471
                                                       ----------           [ZW]
----------         -------------     -----------
Operating income                                        3,075,889            [ZW]
1,345,368              (131,428)      4,289,829

Interest expense (net)                                    929,529               [ZW]
16,185               387,812 (2)   1,317,341
                                                                                                     [ZW]
(16,185)(3)
                                                       ----------           [ZW]
----------         -------------     -----------
Income before provision for income taxes                2,146,360            [ZW]
1,329,183              (503,055)      2,972,488

Provision for income taxes                                [ZW]
456,763                2,825               338,035 (5)     797,623
                                                       ----------           [ZW]
----------         -------------     -----------
Net income                                             $1,689,597           [ZW]
$1,326,358         $    (841,090)     $2,174,865
                                                       ==========           [ZW]
==========         =============     ===========

Net income per common share                                 $0.36          [ZW]
$132,635.80                                $0.46
                                                       ==========           [ZW]
==========         =============     ===========

Weighted average number of [ZW]
common                                                                        [ZW]
(10)(6)
shares outstanding                                      [ZW]
4,745,754                   10                15,000 (6)   4,760,754
                                                       ==========           [ZW]
==========         =============     ===========
</TABLE>


                                       16






<PAGE>

<PAGE>


          SEMICONDUCTOR PACKAGING MATERIALS CO., INC. AND SUBSIDIARIES
          NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995

(1)  Adjustment  which reflects nine months of  depreciation  expense on Retconn
     Incorporated   machinery  and  equipment  and  furniture  and  fixtures  at
     appraised values  amounting to $431,204,  assuming an estimated useful life
     of seven years on a straight  line basis  adjusted  by actual  depreciation
     expense on machinery and  equipment and furniture and fixtures  recorded by
     Retconn  Incorporated  for  the  nine  months  ended  September  30,  1995,
     amounting to $46,935.

(2)  Adjustment  which records interest expense on a $6,000,000 term note with a
     floating rate yielding an effective interest rate of approximately 8.5%.

(3)  Adjustment  which  records  reduction in interest  expense on $200,000 term
     note repaid concurrent with the acquisition.

(4)  Adjustment  which  records the  amortization  of the excess of the purchase
     price  paid for the fair  market  value of all  tangible  and  identifiable
     intangible assets acquired less liabilities  assumed,  totaling $4,405,430,
     amortized over an estimated useful life of twenty-five years.

(5)  Federal  income taxes have been provided for in the nine month period ended
     September 30, 1995  primarily  because  Retconn  Incorporated  prior to its
     acquisition  by the Company,  was treated as an S  corporation  for federal
     income tax  purposes.  The  income tax  provision  of  $338,035  represents
     Retconn's  pre-tax  income  of  $1,329,183  less  total  pre-tax  pro forma
     adjustments of $503,055  adjusted for  Connecticut  income taxes of 11% and
     federal  income  taxes of 34%,  less  $2,825 of taxes  recorded  by Retconn
     Incorporated in the nine month period ended September 30, 1995.

(6)  Adjustment  which  reflects the issuance of 15,000  shares of the Company's
     common stock commensurate with the acquisition and the retirement of (10) S
     corporation shares.


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PART II

Item 5 - Other Information

        Effective  August 28, 1996,  the Company  entered  into a joint  venture
agreement  to develop a silicon  wafer  polishing  and  reclaiming  facility  in
Singapore.  The jointly owned  Singapore  company,  International  Semiconductor
Products  Pte Ltd  ("ISP") is 50.1%  owned by the  Company  and 49.9% owned by a
holding company,  Semiconductor  Alliance Pte Ltd. As of September 30, 1996, the
Company and its joint venture partner each made a $984,202  equity  contribution
into ISP.


Item 6(a) - Exhibits

10.55 - Joint  Venture  Agreement  dated August 28, 1996  between  Semiconductor
Alliance Pte Ltd, the Company and International Semiconductor Products Pte Ltd.


10.56 - Intellectual  Property  License  Agreement dated August 28, 1996 between
American Silicon  Products,  Inc. And International  Semiconductor  Products Pte
Ltd.


                                       18






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                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                   SEMICONDUCTOR PACKAGING MATERIALS CO., INC.



               DATE: NOVEMBER 13, 1996           By: /S/ GILBERT D. RAKER
                                                 -------------------------------
                                                 Name:  Gilbert D. Raker
                                                 Title: Chairman of the Board
                                                 and Chief Executive Officer



               DATE: NOVEMBER 13, 1996           By: /S/ ANDREW A. LOZYNIAK
                                                 -------------------------------
                                                 Name:  Andrew A. Lozyniak
                                                 Title: Treasurer and Secretary
                                                 (Chief Accounting Officer)


                                                        19

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